Netflix can no longer be ignored. My view, as I wrote in my recent article on Viacom (VIAB), is given the consolidated nature of the industry, the major legacy media companies will eventually withhold most if not all their content from Netflix (NFLX). Given licensed content is still over 50% of viewing on Netflix, this will create a ceiling on how dominant Netflix can become.
Netflix doesn't have the market power to force media companies like Disney (DIS) to license its content to it. Therefore, the industry will provide opportunities for multiple, albeit only a few, players in streaming much like the cable bundle provided opportunities for smaller companies to succeed.
CBS (CBS) and Viacom are both leveraging their long legacies in media to create new compelling content that Netflix can't replicate. CBS is doing this through re-created TV series like Star Trek and The Twilight Zone; shows it's increasingly reserving for its own streaming offerings. Viacom is leveraging its movie studio to quickly expand TV production while establishing separate studios for its own cable channels and international offerings to ramp up content production.
By going direct-to-consumer, media companies can leverage their intellectual property in ways previously unimaginable. Disney is the obvious example with successful franchises like Marvel, Star Wars, etc. but CBS and Viacom have their own content they can leverage. You just have to look at Viacom's upcoming movie slate to see how it's turning its business around. It's being done by relying on content from well-known franchises and past hit movies/TV shows. Everything from Mission Impossible and Terminator to Dora the Explorer and Spongebob Squarepants. It's had success recently revamping the Transformer franchise and has had some hit new movies like A Quiet Place.
The cable bundle and box office can still be used to fund new
